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Last week’s New York Times piece by Tina Rosenberg, “An Investment Strategy to Save the Planet”, hits more than a few key notes on the fast-growing appetite for low-carbon investment opportunities—taking a particular look at emerging low-carbon index funds tailored for institutional investors.

Indeed, institutional investors—e.g. pension funds, mutual funds and endowments—have the power to shape public markets by demanding that products minimize or mitigate the impacts of climate change. And, investments in public companies that are responding to climate change is one way to gain exposure to “climate-alpha” and diversify investments in light of global commitments made last month in Paris.

There is, however, another fast-growing opportunity for institutional investors to participate in the world’s low-carbon movement: direct investments in natural climate solutions on the ground. On this front, impact investments that reduce or mitigate the impacts of climate change—and produce many other environmental co-benefits—are emerging.

For example, The Nature Conservancy’s impact investing unit, NatureVest, is expanding investing opportunities for climate action in two major ways:

Mitigate carbon emissions by investing in nature and conservation. For example, we’re supporting large-scale landscape conservation in the Central Appalachian mountains to protect the carbon storage capacity of its forests, support sustainable natural resource economies such as timber harvesting and recreation, and reduce the threat of mountaintop removal coal mining (and its associated greenhouse gas emissions).

Help communities—particularly the most vulnerable to dislocation and economic disruption—increase their resilience to a changing climate. For example, we recently participated in a first-of-its-kind debt swap deal for the small island nation of Seychelles (off the eastern coast of Africa) to increase protection of the nation’s crucial marine resources and enhance physical and economic resilience to rising seas and the potential for more frequent severe storms.

Rosenberg’s piece does a great job highlighting that the appetite for low-carbon investments has outpaced the development of viable financial opportunities that offer competitive risk adjusted returns.

The year ahead could very well offer a diversity of ways to close that gap—not only through new low-carbon investment funds but also through new direct investments in natural climate solutions.